California bans intoxicating hemp

CALIFORNIA HEMP
Gov. Newsom bans hemp-derived THC products

What happened: In the latest hemp versus cannabis clash, California Gov. Gavin Newsom took perhaps the boldest step of any state yet — he’s banning hemp-derived THC products in the state.

The emergency ban went into effect on Friday afternoon.

What he’s saying: “We don’t want to kill the hemp industry, we want to regulate. They have advanced a loop-hole,” Newsom said, at what appeared on social media to be a press conference though no reporters were in attendance or able to ask questions. 

Let’s back up for a second: Longtime readers of this newsletter know the backstory of the hemp versus cannabis fight. 

For those that don’t, let’s bring you up to speed quickly: Hemp was legalized federally by the 2018 Farm Bill. That led to an explosion of CBD products — a compound found in the hemp plant — though the huge market that some brands in the early days expected didn’t quite materialize. 

Some companies have since found novel ways to synthesize the intoxicating THC, which is found in extremely low qualities in legal hemp, which by definition are cannabis plants containing less than 0.3% THC. 

These companies maintain these products are federally legal and are able to be sold across all 50 states, though some state governments have started to crack down, like California’s.

But cannabis companies that contend with onerous state-by-state restrictions maintain that these intoxicating hemp sellers flout the rules they expensively follow. And, they say that synthesizing THC can leave dangerous byproducts that consumers inhale. 

That’s set up situations, like in Florida, where hemp companies are actively fighting against legalization.

Why it matters: California’s emergency ban is perhaps the hardest crack down we’ve seen yet. Expect other states to follow suit, unless there is widespread public outcry in California.

The other side: “Hemp and marijuana interests must stop fighting each other and learn to work together. It’s time for us all to unify as cannabis interests to advocate for a cohesive federal regulatory pathway that covers all cannabinoid products, starting with full-spectrum CBD and other hemp products legalized under the 2018 Farm Bill,” Jim Higdon, the founder of Cornbread Hemp, said in a Marijuana Moment editorial.

And more: A federal court ruled last week that the Drug Enforcement Administration’s classification of intoxicating hemp-derived cannabinoids wasn’t entitled to deference (remember Chevron?).

In plain English, that means a federal court ruled that intoxicating hemp-derived products are federally legal. More on this in Tuesday’s newsletter. 

-JB

FROM THE OUTLAW REPORT*
First D.C. gifting store padlocked by police

Driving the news: The long-anticipated crackdown on unlicensed cannabis “gifting” shops in Washington, D.C. has begun. (Think of this as DC’s version of NYC’s “Padlock to Protect” program.)

The details: Supreme Terpene is not the most prominent gifting store in D.C. or the only one allegedly gifting mushrooms. However out of 23 cease and desists delivered to stores found to be illegally gifting cannabis products in the city through August, it was the first store to get raided and padlocked shut by D.C. police on Thursday, Sept. 5, 2024. Two employees were arrested and charged with felony intent to distribute cannabis. 

Why it matters: The padlocking of the first D.C. gifting store comes after pressure from the legal market to squash unlicensed store competition and after D.C.’s first testing lab opened which enforced D.C.’s regulator, the Alcoholic Beverage and Cannabis Administration (ABCA), and law enforcement’s power to close and padlock establishments that distribute untested cannabis products. 

What’s next? It is unclear if ABCA will continue to padlock additional stores found to just be selling or gifting cannabis while unlicensed. 

As this is a breaking story, subscribe to The Outlaw Report for all the latest Maryland, D.C., and Virginia cannabis news. 

*Each week, Cultivated will bring you the most important and timely stories from Maryland, D.C., and Virginia in partnership with The Outlaw Report.

Weed cuts alcohol sales, analysts say 🌿
Analysts at Bloomberg Intelligence say legal cannabis is a “significant threat” to the alcohol industry. The analysts say that slumping alcohol sales “may extend indefinitely” given increased consumer access to cannabis.

Stephen Colbert joked about former President Donald Trump’s positive comments on cannabis last week:

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